Can Microsoft Claim 15% of the Tablet Market?
Sep 16th 2011 8:46PM
Updated Sep 16th 2011 8:48PM
Now an RBC Capital Markets analyst, Robert Breza, is predicting that Microsoft will claim a 15% share of the tablet market by 2014. That's quite a goal, especially when considering that Windows 8 tablets won't be reaching users' hands and fingers until around late 2012, leaving effectively only two years to make a big dent in the market that Apple (NAS: AAPL) created and currently owns, for all intents and purposes.
According to figures released yesterday from market-research firm IDC, the iPad 2 took the Lion's share -- pun intended -- of tablet sales last quarter at 68.3%, up sequentially from 65.7%. Research In Motion's (NAS: RIMM) PlayBook grabbed 4.9%, while Google (NAS: GOOG) Android slipped from 34% to 26.8%. Interestingly, Hewlett-Packard's (NYS: HPQ) fire sale-priced TouchPad buying spree is predicted to earn webOS a 4.7% share in the third quarter before dropping to 0% by 2012 in the absence of any direction for that platform.
A little speculation never hurt anyone; let's allow our imaginations to wander a bit. IDC has raised its forecast to 62.5 million shipments for all of 2011 because of strong demand. Total shipments are a constantly moving target. In May 2010, IDC pegged 2014 tablet shipments at 46 million, and now it sees 35% more than that original figure three years sooner.
Tablet shipments ended up around 18 million for 2010. If IDC's 2011 forecast turns out somewhat close, that would represent a 247% annual increase in unit shipments. If we use an annual growth rate of 100% each year, 2014 shipments would fall around 500 million units. A 15% share would equal 75 million Windows 8 tablets shipped in 2014. To put that into perspective, today's PC market is roughly 350 million units, so predicting a 500 million-unit tablet market in a few short years is a tall order to fill.
The tablet market is so nascent that it's increasingly hard to forecast growth rates with accuracy. I think in the short run it's entirely possible for tablet growth to even accelerate as opposed to the deceleration in our scenario here. Either way, keep in mind that we're purely speculating.
Can Microsoft load Windows 8 on 75 million tablets shipped by OEM partners in 2014? As astronomical as it sounds, I'm going to vote yes on this one. Call me crazy, but I'm not nearly as crazy as the growth rates that the budding tablet market is showing in its formative years.
What do you think? Share your thoughts in the comments box below.
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At the time this article was published Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google, Apple, Research In Motion, and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Microsoft and creating bull call spread positions in Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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